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There are a number of ways to teach kids to listen. Make stories interesting to listen to, and discuss them during and after they are read. Play Simon Says and other games that require attentive listening. Play telephone. Make up games finding rhyming words. Teach young children to use the real telephone on calls that are meaningful to them, such as chats with friends and grandparents. Teach older children (age 7 and above) how to take phone messages.
(This tip submitted by Shirley Sullivan, Kid Guru)